What does a CEO do?

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Rikkitic

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#196364 28-May-2016 14:54

I see an item in our paper today about the eye-watering salary levels of CEOs. This is mainly about US CEOs but I know the issue also exists in other countries, and on a lesser scale, even here in New Zealand.

It is easy to feel outraged about multi-million dollar executive pay packages, or huge bonuses voted by shareholders, especially when ordinary workers are struggling to get by, and companies don't seem to be doing all that well anyway, but that is not the issue I want to focus on here. Instead, I would like to ask a serious question of just what it is, exactly, that CEOs do? Whether they are paid one million or a hundred million, what is it that thay are paid for? Are they expected to have some kind of special insight, or creative vision? What is it that they do, that others can't? What does it take to run a company? What makes a CEO more special than any other executive officer? What qualifies someone to be a CEO? Can anyone with a degree of intelligence and experience do a reasonable job of being a CEO or does it require some special quality? Just what is it that these people do?

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#1561229 28-May-2016 14:59

Meetings. Lots of them.

Do whatever you want to do man.

jmh

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#1561230 28-May-2016 15:00

They set the strategic direction of the company. Many are appointed via their ability to bullsh*t a board into believing they are a messiah who will perform miracles. When they don't, they get a golden handshake and move on to the next one. Occasionally you will get one who actually achieves something. My perception is that these ones usually have worked up through the business and actually know what they are doing.

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#1561241 28-May-2016 15:14

They dont really do any real work. They create a vision, make the direct reports carry them out, who make the next level reports cary them out.

They also devote a LOT of time in a working week.

Make decisions, motivate, get the management team working HARD to make the business a success

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#1561244 28-May-2016 15:26

They also have executive meetings in places like Sky Tower to discuss whether to take away the 15 minute tea breaks off workers. Dinners too, to network with key stakeholders. These poor guys have to work such long hours. A knowledge of fine wine is essential.

mattwnz

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#1561246 28-May-2016 15:35

The title IMO is used to justify being paid high wages. It wasn't a title that used to be used too often but now almost all organisations and companies have a CEO. Look at local councils, the CEO used be be called the town clerk, which I don't believe was all that well paid. But now they are called CEOs they certainly get CEO types of salary. I think NZ has the highest number of people titled a CEOs per population than anywhere else.

alasta

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#1561275 28-May-2016 15:57

As a worker I believe a CEO's key role is to ensure that I have the tools to do my job properly. This means well informed prioritisation of opex and capex budgets across functions that myself and my colleagues need support from such as infrastructure, customer service, product development, etc. In a successful organisation the people on the shop floor know how to succeed - they just need the resources put in the right place.

I don't think it's a hard job to do, but too many CEOs lose touch with what's really going on in the organisation and consequently they pour money into initiatives which ultimately fail. When that happens as a matter of routine then you start to lose talented people, and that kicks off a downward spiral.

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BlinkyBill

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#1561280 28-May-2016 16:10

A CEO implements the strategy of a Board of Directors of a company, or the Shareholding Ministers in the case of a Government Agency. Stereotypically this means delivering goods or services in such a way that the cost/benefit ratio is optimised.

Earlier comments in this thread are breathtakingly ignorant.

antoniosk

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#1561281 28-May-2016 16:13

Almost always a CEO will be running a company that is publicly listed or part of a larger outfit. That means having to report to the Board, Shareholders and markets on a quarterly basis on results, with the underlying minimum being that revenue and profit are always going up and costs are always going down.

Schmoozing takes a lot of time and it's a real skill. The folks with money wont in general talk to just anyone and take them seriously - they expect someone who looks and acts the part, knows people in similar roles who will attest 'yep, they're ok in that role', and who will prove consistently and reliably they know how they are going to get money and make more of it. They do that every 3 months.

Now here's the trick: planning this is blinking hard work. 6 months before the end of your financial year you need to be getting forecasts ready that say how much money you're going to make, how, resources you will be using (not need - just using), known issues coming up and planned investment. Your forecast is baked in around the start of the financial period - and you better hope you got it right, because if you didnt and are underachieving you will be spending every month explaining why until it's fixed or you're booted out.

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#1561282 28-May-2016 16:14

Talk to to corporate
Approve memos
Lead a workshop
Remember birthdays
Direct workflow
My own bathroom
Micromanage
Promote Synergy
At least, that's my understanding according to a song about being a boss.

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TwoSeven

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#1561287 28-May-2016 16:26

I would think that really depends on the structure of the company and its ownership model.

In what I call new school thinking, the CEO is the person that creates and then executes the strategy of the company aided by a leadership team. A board of directiors offers guidance, governance as well as and ensuring the correct skills and resouces are in place.

In what I call old school, the CEO, along with the leadership team, executes the will of the board and I imagine that the board would be responsible for creating and maintaining the long term strategic direction as well as many of the activities already mentioned.

Personally, I think it is important to remember the other members of the XO team, such as the COO, CFO, CIO etc.

One could probably say, that the purpose of the CEO is to grow the success of the company

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#1561289 28-May-2016 16:30

BlinkyBill: A CEO implements the strategy of a Board of Directors of a company, or the Shareholding Ministers in the case of a Government Agency. Stereotypically this means delivering goods or services in such a way that the cost/benefit ratio is optimised.

Earlier comments in this thread are breathtakingly ignorant.

In my painful personal experience they are breathtakingly accurate.

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amiga500

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#1561298 28-May-2016 16:50

If the outsourced filopino cleaner on minimum wage doesn't turn up everyone notices within an hour. If the CEO on $1000000 a year does not turn up people start to notice after a month or two!

blakamin

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#1561317 28-May-2016 17:08

As little as possible.

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#1561351 28-May-2016 18:08

If the OP was serious you can find std role descriptions on google easily enough e.g.: http://managementhelp.org/chiefexecutives/job-description.htm

I report to the NZ GM for a company of approx 400 staff in NZ - and while he is not the CEO (as we are a global firm of 8,500) - his role and responsibilities are very similar to a CEO - but in a NZ context. And I would suggest a lot of CEOS/GM's do likewise - and it ain't an easy job as it carries a sh*it load of responsibility - get it right and everything is "great" (subjective comment) - get it wrong - companies values can plummet, people can lose their jobs and companies can ultimately cease to exist.

If the OP was questioning the relative value of a CEO to workers - then that is indeed a valid question as there have been many examples pf CEO's who have not met their responsibilities - yet seem to get paid inordinate amounts of cash simply because that's what they got paid at the last company - which they also possibly failed.

Shareholders can sometimes revolt but so often the damage is already done and somehow these sorts of overpaid / reckless / useless CEO's often seem to get another gig - rinse / repeat. Go figure ehh?

PS: Watched the Emperors New Clothes the other night - sort of related to the above - if you can tolerate Russell Brand - it's worth a watch.

MaxLV

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#1561355 28-May-2016 18:14

blakamin:

As little as possible.

For as much money as possible.

CEO's 'salaries' are justified because of the 'hard work they do making money'. So often it's claimed (by those that defend these salaries) you have to pay millions to the 'right person' to make the profits the shareholders want. If you pay peanuts, you'll only get monkeys, and no profits.

But when it comes to paying the people in the companies that *actually* do the work and earn the money for the companies, you have to pay them as little as possible (peanuts) for for the maximum amount of work you can get out of them.

That capitalism for ya....

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